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Reasonable Reliance Law and Legal Definition

Reasonable reliance is usually referred to as a theory of recovery
in contract law. It was what a prudent person might believe and act upon
based on something told by another. Sometimes a person acts in reliance
on the promise of a profit or other benefit, only to leaarn that the statements
or promises were either incorrect or were exaggerated. The one who acted
to their detriment in reasonable reliance may recover damages for the costs
of his/her actions or demand performance.

Reasonable reliance connotes the use of the standard of ordinary and
average person. For example, in extending a loan, a creditor may not be
found to reasonably rely on the statements of worth of the debtor unless
there are also some actions taken to verify the assets of the debtor.